Read the full judgment text of CACV 258/2011 on BabelCite. This Court of Appeal judgment was delivered on 12 November 2012 before Cheung JA, Chu JA, Poon J.
Civil appeal – undisclosed principal – agency – personal contracts – construction of contract – tenancy repudiation – fair trial – judicial intervention – Catering business – sale of business – three inter-related agreements (Tenancy Agreement, Transfer Agreement and Takeover Agreement) – defendants sold catering business to plaintiff through her agents Mr Har and Mr Wong – plaintiff alleged defendants failed to procure renewal of Watson and Vogue contracts – whether trial judge's interventions deprived defendants of a fair trial – whether plaintiff was undisclosed principal of Mr Har and Mr Wong – whether Three Agreements were personal contracts barring undisclosed principal from suing – whether deductions should be made from Vogue Sum and Watson Sums for running costs – whether damages should be assessed for breach of Tenancy Agreement after vacant possession returned – proper construction of Clause C of Transfer Agreement providing for pro-rata refunds where contracts not renewed – key facts included Mr Har being undischarged bankrupt, defendants being husband and wife, plaintiff and defendants not knowing each other before the disputed transactions, three agreements all inter-related for sale of catering business, Vogue and Watson giving notices of termination, defendants failing to transfer shares, plaintiff failing to pay 2nd Instalment and rent from June 2009, and vacant possession returned on 1 July 2009 – held that judicial interventions were legitimate and did not deprive defendants of a fair trial applying Jones v National Coal Board – held that plaintiff was undisclosed principal applying Ting Kwok Keung v Tam Dick Yuen – held that Three Agreements were not personal contracts given their inter-related nature and absence of personal clauses in Transfer and Takeover Agreements – held that deductions for running costs were not open as not pleaded and no evidence – held that tenancy ended on acceptance of vacant possession on 1 July 2009 and defendants suffered no loss – held that Clause C should be construed using actual period of operation (4 months) rather than guaranteed period as multiplier base – appeal allowed to limited extent – sums under Clause C varied to HK$250,000 and HK$434,000 – judgment entered for defendants on counterclaim for 2nd and 3rd Instalments (HK$400,000) with deduction against Vogue Sum standing – balance of appeal dismissed – plaintiff entitled to 90% of costs of appeal.
Legal issues: Whether judicial interventions deprived defendants of a fair trial · Whether plaintiff was an undisclosed principal of Mr Har and Mr Wong · Whether the Three Agreements were personal contracts debarring the undisclosed principal from suing · Whether deductions for running costs should be made from Vogue Sum and Watson Sums · Whether damages should be assessed for breach of Tenancy Agreement · Proper construction of Clause C of the Transfer Agreement
Outcome: Appeal allowed to a limited extent. The sums under Clause C of the Transfer Agreement were varied, and judgment was entered for the defendants on the counterclaim for the 2nd and 3rd Instalments (though the deduction against the Vogue Sum stands). The balance of the appeal was dismissed.
Cited by 2 cases · Cites 1 case